Gold Rises To 3-Month High; Silver Has Longest Rally Since ’68 Nicholas Larkin and Phoebe Sedgman Bloomberg February 17, 2014
Gold advanced to the highest in more than three months as speculation the U.S. economic recovery will slow spurred demand for a haven. Silver headed for the longest rally in more than four decades. Last week, gold climbed 4.1 percent, the most since Aug. 16. U.S. factory production unexpectedly declined in January by the most since May 2009, according to a report on Feb. 14. The metal will establish a new range above $1,300 an ounce, and U.S. investors are becoming friendlier to the commodity, UBS AG said in a report today. Gold last year tumbled the most since 1981 after some investors lost faith in the metal as a store of value, while U.S. policy makers signaled they will slow stimulus. The price has climbed 10 percent this year. “It is the insurance product against further emerging market turmoil, more bad U.S. data, potentially too frothy equity markets and unforeseen market shocks,” UBS analysts in London, who met with U.S. clients last week, wrote in the report. “With positioning so light and the sentiment turn in gold’s favor so recent, we expect that gold will remain bid.” Gold for immediate delivery rose 1 percent to $1,331.50 at 4:32 p.m. New York time. Earlier, the price reached $1,337.93, the highest since Oct. 31. Floor trading on the Comex in New York was closed for a public holiday.
Federal Reserve The Federal Reserve’s monthly bond purchases have been reduced to $65 billion after cuts of $10 billion at each of its past two meetings. Fed Chairman Janet Yellen said last week that debt buying isn’t
on a “pre-set course.� Gold jumped 70 percent from December 2008 to June 2011 as the central bank pumped more than $2 trillion into the financial system. Holdings in gold-backed exchange-traded products rose 3.2 metric tons last week, the most since December 2012, data compiled by Bloomberg show. Last month, assets touched the lowest since October 2009. Billionaire John Paulson, the largest investor in the SPDR Gold Trust, the biggest ETP, kept his stake unchanged in the fourth quarter, according to a government filing Feb. 14. Silver for immediate delivery rose 0.9 percent to $21.70 an ounce. Earlier, the price reached $21.98, the highest since Nov. 7. The metal headed for the 12th straight gain, the longest rally since at least 1968. Spot palladium climbed 0.6 percent to $741.75 an ounce. Earlier, the price reached a three-week high of $743.34. The metal advanced for the ninth straight day, the longest rally since September 2012. Platinum for immediate delivery rose 0.2 percent to $1,430.50 an ounce. Earlier, the price reached a three-week high of $1,434.56. More than 70,000 Association of Mineworkers and Construction Union members have been on strike since Jan. 23 at Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Lonmin Plc mines in South Africa.
At The Federal Reserve, The More Things Change, The More They Stay The Same Ron Paul Infowars.com February 17, 2014
Last week, Federal Reserve Chairman Janet Yellen testified before Congress for the first time since replacing Ben Bernanke at the beginning of the month. Her testimony confirmed what many of us suspected, that interventionist Keynesian policies at the Federal Reserve are well-entrenched and far from over. Mrs. Yellen practically bent over backwards to reassure Wall Street that the Fed would continue its accommodative monetary policy well into any new economic recovery. The same monetary policy that got us into this mess will remain in place until the next crisis hits. Isn’t it amazing that the same people who failed to see the real estate bubble developing, the same people who were so confident about economic recovery that they were talking about “green shoots” five years ago, the same people who have presided over the continued destruction of the dollar’s purchasing power never suffer any repercussions for the failures they have caused? They treat the people of the United States as though we were pawns in a giant chess game, one in which they always win and we the people always lose. No matter how badly they fail, they always get a blank check to do more of the same. It is about time that the power brokers in Washington paid attention to what the Austrian economists have been saying for decades. Our economic crises are caused by central bank infusions of easy money into the banking system. This easy money distorts the structure of production and results in malinvested resources, an allocation of resources into economic bubbles and away from sectors that actually serve consumers’ needs. The only true solution to these burst bubbles is to allow the malinvested resources to be liquidated and put to use in other areas. Yet the Federal Reserve’s solution has always been to pump more money and credit into the financial system in order to keep the boom period going, and Mrs. Yellen’s proposals are no exception. Every time the Fed engages in this loose monetary policy, it just sows the seeds for the next crisis, making the next crash even worse. Look at charts of the federal funds rate to see how the Fed has had to lower interest rates further and longer with each successive crisis. From six percent, to three percent, to one percent, and now the Fed is at zero. Some Keynesian economists have even urged central banks to drop interest rates below zero, which would mean charging people to keep money in bank accounts. Chairman Yellen understands how ludicrous negative interest rates are, and she said as much in her question and answer period last week. But that zero lower rate means the Fed has had to resort to unusual and extraordinary measures: quantitative easing. As a result, the Fed now sits on a balance sheet equivalent to nearly 25 percent of US GDP, and is committing to continuing to purchase tens of billions more dollars of assets each month. When will this madness stop? Sound economic growth is based on savings and investment, deferring consumption today in order to consume more in the future. Everything the Fed is doing is exactly the opposite, engaging in short-sighted policies in an attempt to spur consumption today, which will lead to a depletion of capital, a crippling of the economy, and the impoverishment of future generations. We owe it not only to ourselves, but to our children and our grandchildren, to rein in the Federal Reserve and end once and for all its misguided and destructive monetary policy. Ron Paul's Texas Straight Talk 2/17/14: At the Fed, Just More of the Same with Yellen VIDEO BELOW http://www.youtube.com/watch?v=ptpsYiUhNWU
Nasty Winter Puts Nation’s Economy In Deep Freeze Don Dahler cbsnews.com February 17, 2014 It has been the winter of our discontent. Storm after storm brought car accidents, flight delays, school and business closings and budget-busting overtime for snow removal crews. The net result: the economy still recovering from the recession has chilled. Financial analyst Jordan Goodman says bad weather cost the nation $50 billion in lost productivity. "The retail segment has clearly been hard hit, we've had numbers down – 0.4 percent in January," Goodman said. "I think it's going to be even worse in February; people just aren't going to the stores if they're in snowstorms." Manufacturing dropped 0.8 percent in January -- the most in almost five years. Municipalities across the country are struggling to cover the costs. Tony Sharan is superintendent of highways for Ramapo, N.Y. "Right now we're probably about $70,000 over the salt budget and about $63,000 over on overtime, that's not counting this past storm," Sharan said. Chicago budgeted $20 million this year for salting and plowing roads -- they've already spent $25 million. Some 500 water mains burst in Detroit last month, almost twice as many as usual, forcing the bankrupt city to hire extra crews to fix them. Elgin City in Illinois has already spent $615,076 in weather-related expenses -- three times the norm. Propane bills in Staunton, Va., soared 32 percent over last year. Homeowners in Waco, Texas, are seeing electric bills 50 percent higher 2013. And crews in Delaware racked up 65,000 overtime hours clearing state roads. This winter, airlines canceled more flights than in the past 25 years. More than 75,000 flights never took off, costing passengers an estimated $3 billion in hotels, extra meals and lost productivity. Nasty winter puts nation’s economy in deep freeze VIDEO BELOW http://www.cbsnews.com/news/nasty-winter-puts-nations-economy-in-deep-freeze/
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